RationalFX: Lockdown eased further across Britain yesterday, with indoor dining back on the menu and travel to selected countries permitted. Hopes for the economy heightened in response.
However, economists are looking over their shoulders as cases of the Indian variant continue to rise. Secretary of State for Health, Matt Hancock, yesterday told the House of Commons there were now 2,323 confirmed cases of the variant in the UK, a 77% increase over the last five days.
Boris Johnson also commented that the variant “could pose a threat” to lifting all remaining lockdown restrictions on 21 June. There have also been reports local lockdowns could be imposed to prevent the spread. In general. any delay to the road-map would be bad news for sterling in the short term.
Despite this, it’s assumed yesterday’s reopening will have a bigger marginal impact on economic activity compared to anything the lifting of social gathering and distancing rules in June will generate. So the hits to sterling may not be as extreme as some predict.
For now research from Oxford University suggests the pacey vaccine rollout will be enough to curb this new variant. With the majority of high risk individuals fully vaccinated, the government believes the NHS will not come under sustained pressure.
Finally, investors were gifted the UK unemployment rate figure for March this morning. Coming in at 4.8%, the reading beat the 4.9% consensus. In addition, April’s claimant count change recorded a surprise drop of 15.1k, beating last months reading of 19.4k. Any sign that joblessness is decreasing is positive for the pound.
07:00 – GBP- Claimant count change
07:00 – GBP- ILO Unemployment rate (Mar)
09:00 – EUR- GDP Q1 QoQ
09:00 – EUR – GDP Q1 YoY
14:00 – ECB – Lagarde Speech
Source : ETFWorld.co.uk